VUZF Lab: Risks for deterioration of the Bulgarian economy are increasing
The cyclicality of economic processes suggests that after years of economic growth, as observed in Europe, there will be a recession in development with a slowdown in the global economy. The participants in the round table „New economic crisis in Bulgaria – when and why“ organized by VUZF Lab at the VUZF University, also joined that statement. The event was attended by the Deputy Prime Minister for Economic and Demographic Policy Mariana Nikolova, Deputy Minister of Economy Lachezar Borisov, Chairman of the Parliamentary Commission for Economic Policy and Tourism Petar Kanev, members of the Fiscal Council, National Audit Office, leading economists, financial experts and analysts, representatives of state institutions, employers’ organizations and business, academic and scientific environment.
Data were quoted, saying that all international organizations and institutions that do such analyzes – the International Monetary Fund, the World Bank, the European Commission – are predicting a slowdown in the global economy. “ Bulgarian government is making an extraordinary effort to stimulate economic growth while at the same time achieving sustainability of the economy by creating a prosperous business environment“ said the Deputy Prime Minister Nikolova, and insisted that the state has many financial mechanisms to face a possible economic crisis, one of which is the fiscal reserve.
VUZF Rector and CEO of VUZF Lab, Assoc. Prof. Grigory Vazov, indicated not just whether there is a new crisis, but whether it is possible to manage the processes related to its occurrence, as well as to emerge from it. „The aim of this round table is exactly to propose and find the solutions to be made available to the public, the state, the business and to reach every single person, so to know how to manage their personal finances in the next few years,“ said the Rector of VUZF.
The slowdown in the euro area and the EU economy is up to 0.2% in the last two quarters of 2018, as it continues in January 2019. The IMF and OECD forecast is for growth of 1.8% in 2019 and 1.6% in 2020, and 1.6% in 2019 and 2020. At the forecast is a slowdown in Bulgaria’s growth to 2.7% in the third quarter of 2018. According to the IMF data, the delay will continue at the same rate in 2020, it was clear from a report that Assoc. Prof. Daniela Bobeva, VUZF lecturer and former Deputy Prime Minister, presented during the discussion.
She explained that the slowdown in growth in Bulgaria will depend both on the possible deterioration of the external environment and on the accumulated risks at the economy. According to Prof. Bobeva the main weaknesses of our economy to face internal and external shocks are the weak growth and the significant role of the non-tradable sector, the low elasticity of the increased public spending, the risks to the financial sector in relation with European Central Bank review.
The experts from the discussion joined the idea that recession is not expected this year, but combined with external and internal factors, it would lead to worsening of symptoms and crisis. Some of the participants pointed on the postponement of structural reforms in the past good years for the economy, which puts into question the existing buffers and macroeconomic stability – the problems in the energy, healthcare and other unreformed sectors.
Can the state take any anti-cyclical measures and should it do it – this question did not get a single answer. However, according to all experts, the high administrative burdens and regulations of the financial sector and the economy itself, may provide even greater risks foe the economic stability.
Panellists in the discussion were Apostol Apostolov, President of VUZF, Chairman of the Supervisory Board of Texim Bank; Lubomir Datsov, Member of the Fiscal Council of the Republic of Bulgaria; Svetla Nestorova, Chairperson of the Association of Bulgarian Insurers, Prof. Dr. Grigor Dimitrov, Lecturer at VUZF University and Vladimir Karolev, economist. Moderator of the round table was Assoc. Prof. Grigoriy Vazov.
The round table on the economic crisis is the next forum organized by VUZF Lab on major socio-economic themes by which the Laboratory at the business university fulfills its public mission – focusing on topical issues by showing different perspective, looking for and offering solutions and influencing the formation of different state sectoral policies.
Key conclusions, proposals and recommendations of the round table will be summarized and submitted to the Council of Ministers, National Assembly, Ministry of Economy, Ministry of Finance, Bulgarian National Bank, other competent state institutions, branch and employers organizations. VUZF Lab.
Media partners was Investor.bg, Bloomberg TV Bulgaria, Bulgaria ON AIR and “Standart” newsp.